REFILE-Morgan Stanley to adjust prices on Facebook trades

May 23, 2012|Reuters

By Joseph A. Giannone

NEW YORK, May 23 (Reuters) - Morgan Stanley toldbrokers on Wednesday it is reviewing every Facebook Inctrade and will make price adjustments for retail customers whopaid too much during the social network company's debut lastweek, according to an internal memo.

Morgan Stanley, the lead underwriter of Facebook's initialpublic offering on Friday, in the memo also said "many" of thefirst-day trades have now been processed and are appearing inclient accounts. The company did not specify how much itexpected to pay in total price adjustments.

"All orders are currently being reviewed for best executionpricing," the memo, which was obtained by Reuters, said. "Weexpect there will be a number of price adjustments. The largestadjustments will be processed first over the next several daysand the remaining adjustments will be completed as quickly andas thoroughly as possible."

A "very limited number of orders" are still pending, butMorgan Stanley told its more than 17,000 brokers that it expectsto have remaining orders resolved and booked Wednesday.

Morgan Stanley confirmed the contents of the memo butdeclined to elaborate.

Facebook's highly anticipated market debut Friday was besetby trading glitches on the Nasdaq s tock market. T he opening oftrading in the social networking company's new shares wasdelayed by about 30 minutes. Shares priced by underwriters at$38 briefly rose to $45 in early trading but then fell and endedon Friday little changed.

A significant number of investors at Morgan Stanley andother brokerages were left in limbo - some as late as Tuesday -with trade orders that were not processed.